Greg Hinz On Politics

Pension quagmire deepens — for lawmakers and taxpayers

After a legislative session in which lawmakers stuck their collective head so far down a hole on pension reform that an ostrich would blush, there are no easy outs, only pain both for legislators and the state as a whole.

The collective failure to deal with Illinois' single most important government problem involved just about everybody in Springfield on both sides of the party aisle, though some more than others. With the 2014 elections now looming and supermajority vote requirements in effect, it now will be more difficult, not less, than it would have been before June 1 to fill an at least $100 billion hole in the state's retirement accounts.

Lawmakers didn't get the job done, Democrats and Republicans, senators and representatives. Now, we'll find out how badly that hurts the state's fiscal status, economy and ability to create a favorable climate needed to attract jobs.

The most immediate response to Springfield's non-action is very likely to come this week, perhaps as soon as today. It will come from Wall Street.

After repeatedly clearing their throats, the big bond-rating houses won't have much choice but to again lower Illinois' credit rating, which already was the lowest of the 50 states. No American state has ever been rated at the junk level, at least not since the Great Depression. But Illinois is pushing it, with not only the state itself but any public entity in the state in danger of harm.

It would be nice to think a Wall Street move would prompt a change in attitude.

Gov. Pat Quinn will meet with legislative leaders sometime this week, his office says. "All options are on the table," including calling a special legislative session to take up pension reform and perhaps other issues, his spokeswoman says.

But Mr. Quinn can't make them do anything. And, at least so far, he hasn't displayed the political talent to talk them into doing it on their own.

That means Senate President John Cullerton will continue to argue that only his relatively modest reform plan, negotiated with labor unions, can pass constitutional muster. And House Speaker Michael Madigan will continue to assert that only his proposal saves the kind of money really needed.

Both men have points. Mr. Cullerton did offer to pass Mr. Madigan's bill if the senator's measure were approved, too, and would take immediate effect if the courts knocked out Mr. Madigan's bill. Mr. Madigan's bill indeed faces the stiffer legal test, but outside groups such as the Civic Federation say it is far more fiscally responsible.

ELECTION TIME HURTS CHANCES

Neither man seems inclined to compromise. And with petition filing to open soon for legislative candidates, don't expect many profiles in courage in coming months. Willingness by lawmakers to cast a tough vote diminishes, not grows, as election time nears.

Republicans are part of the problem, too. Though they're in the minority in the General Assembly, they mostly stayed away from the tough Madigan bill, preferring the weaker Cullerton plan. Apparently, Republicans like campaign cash from unions and votes from government retirees just as much as the Democrats.

And don't forget Mayor Rahm Emanuel.

After months of arguing for pension reform and two years of promising to avoid Daley-style financial tricks, what did he do last week? He threw his support behind a last-second bill to give Chicago Public Schools yet another pension holiday, effectively saying it's more important to keep all the classrooms open in September than to pay the bills and shore up a teachers pension fund that has only 56 percent of the assets needed to pay promised pensions.

So much for acting — as opposed to talking — tough. Tomorrow is another day, right, Mr. Mayor?

It took Mr. Quinn to kill the bill by promising to veto it.

Anyhow, maybe I'm wrong and they'll all get together in a couple of weeks. Maybe. Or maybe some of those wonderful conspiracy rumors out there are true.

Like the one that Messrs. Madigan and Cullerton really are in league together to trash Mr. Quinn and elect Attorney General Lisa Madigan governor.

Who knows?

What I do know is this: It now will take a supermajority 60 percent vote of the General Assembly to pass any pension plan that will take effect before July 1, 2014 — the same General Assembly that last week couldn't pass any pension bill through either House by a simple majority. And the elections clock is ticking.